The subsidy is a tax, in the form of higher prices. A flat tax is a regressive tax. Lower income/wealth deciles pay proportionately more towards the subsidy t

The subsidy is a tax, in the form of higher prices. A flat tax is a regressive tax. Lower income/wealth deciles pay proportionately more towards the subsidy than upper income/wealth deciles. This is always the intent when government does not explicitly provide a taxpayer subsidy, because the cash cannot come from the government, otherwise the government’s finances will reflect the higher cash outlay, necessitating higher tax revenue, which could end up with higher tax rates for richer people.